by Calculated Risk on 6/19/2019 10:16:00 AM
Wednesday, June 19, 2019
Note: This index is a leading indicator primarily for new Commercial Real Estate (CRE) investment.
From the AIA: Architecture billings remain flat
Demand for design services in May remained essentially flat in comparison to the previous month, according to a new report today from The American Institute of Architects (AIA).Click on graph for larger image.
AIA’s Architecture Billings Index (ABI) score for May showed a small increase in design services at 50.2, which is slightly down from 50.5 in April. Any score above 50 indicates an increase in billings. Both the project inquiries index and the design contracts index softened in May but remained positive.
“The last four consecutive months, firm billings have either decreased or been flat, the longest period of that level of sustained softness since 2012,” said AIA Chief Economist Kermit Baker, PhD, Hon. AIA. “While both inquiries into new projects and the value of new design contracts remained positive, they both softened in May, another sign the amount of pending work in the pipeline at firms may be starting to stabilize.”
• Regional averages: Midwest (51.6); South (51.4); West (50.0); Northeast (47.5)
• Sector index breakdown: mixed practice (55.4); commercial/industrial (53.0); institutional (48.0); multi-family residential (46.0)
This graph shows the Architecture Billings Index since 1996. The index was at 50.2 in May, down from 50.5 in April. Anything above 50 indicates expansion in demand for architects' services.
Note: This includes commercial and industrial facilities like hotels and office buildings, multi-family residential, as well as schools, hospitals and other institutions.
According to the AIA, there is an "approximate nine to twelve month lag time between architecture billings and construction spending" on non-residential construction. This index has been positive for 11 of the previous 12 months, suggesting a some further increase in CRE investment in 2019 - but this is the weakest four month stretch since 2012.
Posted by Calculated Risk on 6/19/2019 10:16:00 AM